Is a US-China trade war likely?

There are a lot of people in the US asking this very question, but the reality is nobody has a definitive answer. The Trump administration has significant issues with China, mainly underpinned by a large trade deficit in goods of some $350bn. In recent months, there have been tariff threats from the US and counter tariff threats from China, some of which have already come into force. What is absolutely clear is that the US farming sector is very nervous about any talk of trade wars and commodity markets have been very unsteady due to the uncertainty.

Why was the US farm bill defeated last month?

During the negotiations on the farm bill, House Republicans and Democrats couldn’t agree on welfare reforms. Eighty per cent of farm bill spending goes on food stamps, or the Supplementary Nutrition Assistance Program (SNAP), which Republicans want to reform. Democrats are fiercely opposed to these reforms and voted against the farm bill.

Will the US farm bill be agreed by year end?

The current farm bill expires on 30 September and history would indicate that a new farm bill will not be ready by this date or indeed the year end. However, a consensus will eventually be reached, as it is too important for US agriculture for the process to fail. If a new bill wasn’t agreed by the deadline, the current bill would simply be rolled over into next year.

How important is the US farm bill?

In simple terms, the farm bill is the CAP of US agriculture. It is a five-year programme that sets the policy direction for US agriculture. Crop insurance and counter-cyclical payment supports are the most important aspects of the bill for US farmers. The proposed 2018 farm bill is expected to closely mirror the 2014 version. There will be some extra supports for dairy and cotton.

How are Irish food and drink exports to the US performing?

The US remains Ireland’s second-most-important food and drink market after the UK with exports of €1.1bn last year, mainly driven by alcohol and dairy. Kerrygold butter is the second-best-selling butter brand by value, and it will soon become the second-best-selling by volume. Ireland exported around 2,400t of beef to the US in 2017, which is small in the overall context of the Irish beef industry. Nevertheless, exports are up about 33% so far this year. The US beef industry is producing record levels of red meat, and it remains difficult for our industry to compete on price. Irish beef processors have bodies on the ground and we continue to work collaboratively to identify opportunities which will hopefully see the tonnages grow over the coming years.